Razorpay adds credit cards to its neo-banking platform; acquires payroll management startup Opfin

Payments solutions platform, Razorpay, on Friday made a couple of announcements, highlighting their strategy to go beyond payments and be a neo-banking solution for startups, SMEs, as well as the gig economy. In this line, Razorpay launched corporate credit cards for SMEs and startups, with RBL as the company’s banking partner.

With this launch, Razorpay aims to solve challenges around access to credit, short term credit, reconciliation, expense filing, and help businesses lead a healthy financial life. Built on convenience and privacy, the Razorpay credit card will allow businesses a no-cost interest for 50 days with a credit line ranging between Rs 50,000 to Rs 25,00,000.

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“Inspite of existing for a long time, startups and small businesses still find it difficult to get a corporate card from banks, since they (startups) are considered as loss making entities. With the Razorpay credit card, we want to solve this and provide better access to credit,” Harshil Mathur, Co-founder and CEO, Razorpay, told YourStory. 

According to the founders, the interest on the credit card will vary from 25 to 30 percent. And with no issuance cost, the company plans to make revenues through the transaction fees, which range between 1.8 to 1.9 percent, and defaults made on the payments. 

In the coming fiscal, Razorpay also looks to introduce a ‘loyalty’ feature with the credit card.  

Launching current accounts for businesses

In line of being a complete neo-banking solution, Razorpay also launched Current Accounts as part of the RazorpayX platform for client partners.  

“There is an increasing market demand for a platform that supports a large number of transactions, provide superior customer experience, and one that lets a business define its own processes - traditional Current Accounts are not there yet,” the company said.  

Along with features that RazorpayX already provides, the company will now support standard banking features like debit cards, cash transfers, along with FD, RD and other treasury offerings.

Currently, close to 3,000 businesses and startups are leveraging Razorpay’s current account feature. The Bengaluru-based payments company states that it aims to scale this offering to 40 percent of its entire client base. 

Opening the platform to freelancers and home-preneurs

Historically serving businesses, Razorpay also announced that it will be opening the platform to the gig economy, and will be launching payment support for freelancers, consultants, and other unregistered businesses like tutors, gym instructors, and others selling online via Instagram, Facebook, and other platforms.

“Typically, freelancers face troubles collecting advance payments, creating GST compliant invoices, and lack enterprise grade tools to manage their bills and finances and needing constant payment follow-ups. With features like payment support for over 100 currencies, freelancers and individual businesses can access a larger pool of consumers across the world,” said Razorpay in a statement. 

Razorpay wants to have 100,000 freelancers on the platform in the next one year. 

Razorpay acquires Opfin to make headway with payroll solution

Finally, to boost its enterprise capabilities, Razorpay announced the acquisition of Gurugram-based payroll and HR Management Software company, Opfin, to solve for seamless automation of a business’s payroll process.

This acquisition will enable businesses to not only manage their entire payroll process and fund transfers, but also manage filing of taxes and compliances through a single platform, without hiring any external vendors.

This is Razorpay’s second acquisition in the last six months, after Thirdwatch, an artificial intelligence driven company specialising in Big Data and machine learning for real-time fraud prevention.

Speaking on the acquisition, Anuj Jain, Founder, Opfin, said,

“I strongly believe that coming together with Razorpay will accelerate the growth story of payroll management at an industry level. Given Razorpay’s strength in technology and reach across verticals, and Opfin’s software capabilities, I am certain that we will create a dent to make the entire payroll process simple, easy, and quick for businesses".

As a part of the acquisition, the entire Opfin team will be absorbed by Razorpay. In spite of expansion into multiple verticals, payments continues to be at the core of Razorpay’s business.   

Currently, the payments business forms 70 percent of Razorpay’s revenue and the neo-banking platform, Razorpay X along with Razorpay Capital, which forms the rest 30 percent.

The company, at present, has over 600,000 businesses as its clients including the likes of Indigo, BSE, Thomas Cook, Reliance, SpiceJet, Aditya Birla, Sony, and OYO. The team plans to increase this number to 1.4 million by 2020.

The platform currently claims to boast an annualised TPV (Total Payment Volume) of $10 billion.

(Edited by Megha Reddy)

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